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Eliminating Credit Card Debt Through Negotiation

Eliminating Credit Card Debt Through Negotiation

The fact that many Americans are steeped in debt cannot be denied. The government itself is getting into debt in its attempts to deal with numerous bad loans.

Is there some kind of debt settlement agreements that you can reach to help you get out of credit card debts?

There is no definite yes or no answer, as there are a number of related issues to be considered. Debt settlement or even filing for bankruptcy can accomplish different things.

Would they give you the opportunity to get out of your financial predicament and move forward as you live within your means? Depending on your spending practices, these methods can just offer you a temporary breathing space before you fall deeper into debt once more.

While debt settlement option may be of help, it is a step that you should only take if you see that it will create a long lasting change in your financial situation. There are some important points that you need to bear in mind when you plan to take the route of debt settlement.

First, remember that as soon as you start negotiating with your creditors about making lower payments than what you actually owe, your credit rating will suffer a significant dent. When your lenders accept a lower payment, they incur a loss, and they make up for this by reporting your unpaid debt to the credit bureaus.

This alone will have a negative impact on your credit rating for seven years!

Another fact that you should consider is that you will not negotiate directly with the lenders. You will need the services of debt settlement companies to act on your behalf. These companies are notorious for charging exorbitant fees. Many of them require you to make an upfront payment, which effectively leaves you will less money to pay off your debts. If you get a company that accepts payment after negotiating, you may end up losing a high percentage of the forgiven debt as their commission.

There are many pitfalls in the debt settlement path that can easily counter any good you expected to gain by using the companies in the first place. It may be better to simply file for bankruptcy instead. The courts clearly govern the processes involved in filing for bankruptcy. Bear in mind that bankruptcy will likewise feature on your credit rating for seven years.

Avoiding Loan Modification Scams

Avoiding Loan Modification Scams

Getting a loan modification can be very stressful if you don’t have anywhere to go or anyone to speak to about your situation. The main thing that every person looking for help needs to know about, do these companies that charge upfront fees despite them know that they aren’t supposed to.

It’s crazy how companies will charge outrageous prices just to call someone over the phone and fax over an authorization and a guaranteeing that you will get half of your money back, if they give you money back. If you are going to work with someone just make sure that there is some type of money back guarantee. You also need to be careful with the companies that guarantee work and not have a money back guarantee. There are modifications that do get denied, and if you end up in that pool, you will need to at least have your money back for good conscience.

When speaking to a specialist, you will want to make sure they are listening to what you have to say and they are using the right tools that are legal. You need to be able to contact these people to stay updated on the status of your file. If you are dealing with a company online or a company that is not in the local area, you will need to know if they have a real office or if they are an established business at least.

The information that they provide has to be verifiable and realistic. No pie in the sky promises and false so called 99.9% success rates. Just make sure that you are getting the help you need. One thing that you should really pay attention to is how they explain the beginning of the process to you. The only thing that you should be doing is approving an authorization for the company to represent you during the whole process.

If they tell you they need you to supply a bank account routing number, or a copy of your credit report, they are up to something. These are not items they should be asking you for at the very beginning of the process. All they need in the beginning is to submit an authorization signed by you to your lender.

If you cannot verify that the company is a reputable company then you are dealing with someone that is either just starting out or is a scam altogether. It’s just too much of a gamble to rely on someone’s word, even if the person is family. If you do just enough research and get yourself some verification, then you will be able to be comfortable with who you are working with.